Employee Engagement In Fast Food Industry: A Case Study Of McDonald’s Australia

Importance of Employee Engagement in Fast Food Industry

Introduction

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Fast food industry is one of the important industries in Australia. There are different players in the market but McDonald’s is the largest fast food chain in the market having largest market share in industry (Statista, 2018). The figure below shows that a survey respondent stated that they ate most in the McDonald’s in last six month. But the survey also shows that KFC, Subway or Hungry Jack’s are also having strong presence in the market. In recent times the awareness in the health related matter has shown some strong sustainable challenges to the businesses in the industry. Still the industry has grown around 3.7% in the last five years time period (ibisworld, 2017). The revenue of the industry stands at $20bn (ibisworld, 2017). The industry employs around 47624 (ibisworld, 2017). Considering the formal and informal sector of the industry, there are around 984 businesses in the country (ibisworld, 2017). 

[Source: Statista, 2018]

McDonald’s is one of the largest fast food chain in the world and that started their journey from the USA. In recent times McDonald’s is losing ground in the USA market but interestingly the organization is improving its market position in Australia. This aspect of the organization and its operation in the Australia needs to be understood from different aspect of the operation. The model of restaurants, ingredient used, menu, service, and the image in the customer mind is totally diffident for McDonald’s in their Australian operation than the USA operation (Peterson, 2015). In some of the restaurants in Australia McDonald’s prepare fresh type of food in front of the customers. In their marketing promotional aspect business new concepts are being introduced in the Australian market and these successful applications are then being adopted in the USA operation. The brand appeal towards the customer is improved through the multifaceted approach applied in their Australian operation (Peterson, 2015). In their operation McDonald’s strongly understands that the staffs are one of the important factors in this success story. Therefore the organization has developed attractive employee perks and other benefit apart from the basic motivation of the work. Happy working condition with others, greater flexibility in work, variety of experience, better learning opportunity, different discount processes, better diversity and inclusion policy and so on are some of the attractive employee policy that McDonald’s follows in Australia to keep the employee satisfied and engaged in the work force (apply.mcdonalds, 2018). 

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Problem statement

Specific Factors Affecting Employee Engagement in Fast Food Industry

The hospitality industry like the fast food restaurant chain businesses, the employee satisfaction and engagement are some of the important aspect for the success of the business. In these kinds of businesses the customers are directly received by the organization’s staffs and they in a way directly represent the organization toward the customers (Tsai, Cheng & Chang, 2010). Therefore the satisfied employees would have direct correlation with the customer satisfaction of the business. The reason is that the satisfied employee would be more engaged with their work and that would improve the customer satisfaction of the organization. On the other hand the multinational companies would be having some other considerations in their employee policy because of the different working culture of different region (Zheng & Lamond, 2010).McDonald’s also understands the importance of this process and focused on the employees in their Australian operation to fulfil the need of the diverse customers.

Less engaged and hence less satisfied employee is unlikely to stay in the organization (Tsai, Cheng & Chang, 2010). This issue would not only create the staff shortage for the McDonald’s operation but also would increase the cost of operation by increasing the cost for recruitment and selection, training and development and so no. In the restaurant or the fast food like hospitality business the employee turnover rate is high. Some of the estimates show that this industry is having as high as 150% turnover rate (disruptcre, 2018). This higher rate of turnover shows that the employee satisfaction and engagement is also low in the industry because of their relation with the higher turnover. This negative issue is also expected to impact the customer service and satisfaction (Slåtten & Mehmetoglu, 2011). Therefore from the business point of view it would be important to investigate the way the employees can be made engaged with their work process to improve the customer satisfaction outcome. Some of the earlier researches in this hospitality or the fast food industry focused their attention on the employee retention aspect as that is one of the burning issues for the industry (Cross, 2017). but a in depth exploration would need to specifically explore the employee engagement issue for this industry to cope up with better solution for the industry. This current research would try to full fill this specific research gap for the industry.

In recent time the technology factor is changing the industry substantially. On the other hand McDonald’s Australian operation is having different approach to improve customer satisfaction. In the earlier part of this report it is also shown that the market position of McDonald’s is Australia is improving whereas in USA the situation showing some negative indications (Peterson, 2015). Therefore the organization is not only has a different business strategy in n Australia but also a better human resource policy human resource policy that is helping this successful persuasion. Considering this situation it would be appropriate to investigate the McDonald’s operation to understand the HRM policy that McDonald’s followed in Australian that improved their employee engagement and better business outcome (Karatepe, 2013). This aspect is the main reason for choosing the McDonald’s NSW as the case study for the current research.

Role of Human Resource Management in Promoting Employee Satisfaction and Engagement

Research objective and question

The main aim of this research is to find out ways through which employees remain engaged in McDonald’s and how it can bring success in the company.

The objectives that will be covered in this research will be:

  • Making a close study on topics related to HRM and employee satisfaction for enhanced work performance.
  • Mapping pros and cons of employee engagement in firms.
  • Giving suitable examples of present firms that has benefitted from employee engagement in their human resource management systems.
  • Finding ways through which successful companies retains their qualified staff with methods like employee engagement, wages and workforce performance programs.

Question

  • What is the role HRM and employee satisfaction in the enhanced work performance?
  • What are the pros and cons of employee engagement in firms?
  • How the HRM system of McDonald’s contributed in the employee engagement through their policy and appropriates?
  • What are the ways of employee engagement, wages and workforce performance programs that can contribute the employee retention in successful companies?  

Research project justification 

One of the important motivations for the businesses is the growth and profitability position of the business. For the large multinational business having largest market share and establishment of the business as a strong market brand is also highly important. For the hospitality or the fast food industry specific point of view this goals of the business would be highly related with the employee satisfaction and engagement apart from the other business specific strategic reasons (Shuck & Wollard, 2010). Highly engaged employees in this industry provide strong case for the customer relationship and growth potential like situation. There are studies that show strong interrelation between the successful business and the highly engaged staffs. Passionate staffs of the organization are the driving factor that helps to establish the brand in the market and also become strong competitive advantage for the businesses. Another findings in other studies also showed that a favourable customer attitude towards the restaurant brand presence are one of the important outcome of the strongly engaged workforce in the organization (Tsai, Cheng & Chang, 2010). in current business situational context the role of technology is highly relevant for the business marketing and promotion process. There the negative customer perception aroused from the improper employee customer interaction may create negative publicity in the social media. Therefore the negative impact of the customer interaction from the less engaged workforce in the organization would be highly damaging for the businesses (Shuck & Wollard, 2010). Under this circumstances the role of the employees in becoming the business brand ambassador, helping the organization in fighting the market challenges, improving the growth potential of the business would be effectively answered through positively identifying the factors and impact of the employee engagement policies and activity.

The current research is specifically designed to explore the employee engagement factors and how those are helping organizations in the fast food industry. There would be some industry specific factors that would also be impacting the proper employee engagement progress in the organization which needs to be understood to improve the employee engagement in the fast food industry (Albrecht et al., 2015). The literature search has shown that fast food industry and hospitality industry in general are having higher rate of employee turnover. Considering this different research in this sector has has specifically focused on the employee retention, role of motivation in retention (Cross, 2017). On the other hand the employee engagement was also focused for the overall hospitality industry (Slåtten & Mehmetoglu, 2011). but there is a need for employee engagement related focused study for the fast food industry for the better business outcomes and also employee retention. Considering all of these issues it is highly justified in undertaking this research project for the fast food industry of Australia. The case study of McDonald’s would also support the research well, as in recent times McDonald’s is their Australia’s operation was able to register better performance and growth (Peterson, 2015). Therefore investigating McDonald’s as a case study is highly appropriate for the current research.  

Challenges of Employee Turnover in Fast Food Industry

Expected outcome

The current research is highly focused on the factor like employee engagement and the organizational outcomes. The case of  McDonald’s would be able to provide the proper circumstances to identify the factor of employee engagement and their impact of the better performance of McDonald’s in Australia. From the beginning of this research the investigation would start to identify the role of the human resources management in bringing the satisfaction of the employee in improving the engagement in the world. It would also provide the employee engagement related reason that improves the performance of the work (Bal, Kooij & De Jong, 2013).one of the insight that came up in the literature review is that the fast food service industry is having higher employee turnover and that is as high as 150% (disruptcre, 2018). This is one of the challenging issue for the industry for the efficiency, better productivity, cost minimisation, customer satisfaction and branding process improvement. Therefore the insights from the current research would not only help the fast food business for their employee engagement process but also improvement of all the above issues (Shuck & Wollard, 2010). In the hospitality industry the rate of employment is also higher. Therefore improve employee engagement process would be use full for the long carrier of the personnel working in the industry and for the industry it would be important to attract more talents.

Conceptual framework and hypothesis of the research

Employee engagement is one of the significant concept and factor for the human resource management. Employee engagement is the factor that influences the employee in feeling passionate about their work, putting discretionary work effort and commitment for the organization. according to Bharwani & Butt (2012) the business organization in recent time feeling shortage for the proper talent for the proper position of the organization and there the employee engagement, employee satisfaction and employee retention like concepts are becoming more imp[ort for the organizational HRM process. some of the researcher have also explored the matter in relation with the financial performance of the business. according to   Sorenson (2013) the high employee engaged organization on an average are able to deliverer close to 3.9 times more EPS or the ‘earning per share’. In the earlier time of human resource is considered as this input of the business but in recent time that understanding is changed to consider the employee as the resource of the organization. Therefore the behaviour and expectation of the employees, unlike the machine like other input, have different dimensions like the aspiration, individual goals, organizational factor, and professional factors and so on (Bhatnagar & Biswas, 2010). Therefore it would be logical to explore these different factors in the organizational context to develop a model framework for the research. Based on these analyses the factors for engagement identification and proper framework development would be done.

Case Study: McDonald’s Australia

The employee engagement would relate with the job as well as the organizational engagement. The reason is that the employee engagement needs broad understanding for the current research. The symbiotic relation which exists between the organization and the employees is one of the important factors for the employee engagement (Shuck & Wollard, 2010). Wider literature review suggests that the engagement issue would have different variable as per the employee and organizational context (Kaliannan & Adjovu, 2015). The important variable in this research framework would be factors like the organizational pride, work type and nature, management of the performance, values of the organization, environment of the work, management of the talent, conflict between the family and work, support and the leadership of the organization, well beings of the employee, relationship of the co-worker, benefit and compensation (Shuck & Wollard, 2010). These factors are some of the important factor for the job satisfaction and engagement improvement. According to Gupta & Sharma (2016) job satisfaction influences the job engagement and that would in turn influence the organizational engagement. Therefore the organizational engagement and job satisfaction are one of the important predictable factors of the job engagement. On the other hand the reference variable identified simultaneously influences the job engagement and job satisfaction (Albrech, 2011). The clear definition of the job satisfaction considered in the current research would be the positive attitude and feeling of the employee towards the job. On the other hand the job engagement would be defined as the passionate, enthusiastic, pride and dedication behaviour, job role commitment and willingness to contribute more (Albrech, 2011). The definition of organizational engagement would be organizational commitment and concern, become identified with the goals and objectives of the organization.

Hypothesis- job engagement influenced by reference variables has a positive relationship with the job satisfaction and organizational engagement.

Methodology

[Source: Sahay, 2016]

The current research would be conducted by following the research onion shown above. This approach would help the research to follow a proper method to reach to the right conclusion. Considering this the current research would focuses on the positivism philosophy. As per this philosophy the approach would be based on the scientific analysis and investigation (Bryman & Bell, 2015). Here the assumption is that reality is objective and that can be explored through objective scientific approach. The current research of employee engagement investigation in the organizational context of NSW McDonald’s, would be having explanatory approach of research. The current research would also follow the deductive approach of research. As per this approach the current research would first go through the current available literature to find out the relevant theory (Zikmund et al., 2013). These relevant theories then would be used for the hypothesis and research question development. Implementation of secondary data collection methods will help to improve the understanding of pros and cons of employee engagement in firms and provide basic comparison of data that gathered by researcher.  In order to collect secondary information for this research study, books, journals, website, published research papers will be accessed from variety of sources and database.  In this approach the theoretical background is used for the insight development which later would be generalised.

Research Objectives and Approach

Considering the above aspect of the current research, both the qualitative and quantitative approach would be followed. In the quantitative research the survey would be done among the staffs of McDonald’s franchise across the NSW. This survey research strategy is supported by the case study based research strategy to develop proper insight for the current research. The survey questionnaire would be based on the close ended questions and the generated data would be analysed statically (Quinlan et al., 2019). The sampling method used for this process would be based on the probabilistic sampling method which would have a proper representation of the diverse employee kind of this sector. On the other hand the qualitative research process would use the interview approach which would be done on the managers of this sector. This sampling would be done through non probabilistic approach of sampling that means the managers would be selected specifically as per the convenience of the research (Hair Jr et al., 2015). The sample size for the qualitative method would be 3 managers and the quantitative method would be 40 employees.  

Organising the study

The study would be divided on the basis of the following chapters.

Chapter one- would be the introduction.

Chapter two- would be literature review for the research.

Chapter three- would be research methodology.

Chapter four- would be the findings and analysis.

Chapter five- would be the conclusion and recommendation derived from the ongoing study. This conclusion and recommendation would be generalised in this part for the overall fast food industry (Sekaran & Bougie, 2016). 

Gantt chart

Task name

Duration

Starting time

Finish time

Introduction

14 days

10/1/2018

10/18/2018

“Preliminary planning and research aims, objective and question development”

7 days

10/19/2018

10/29/2018

Consulting literature to develop the framework and hypothesis.

7 days

10/30/2018

11/7/2018

Analysing and representing secondary data

7 days

11/8/2018

11/16/2018

Selection of methodology for the research

7 days

11/19/2018

11/27/2018

Following primary research activity

14 days

11/28/2018

12/17/2018

Data analysis and representation

14 days

12/18/2018

1/4/2019

Research report development with proper conclusion and recommendation.

14 days

1/7/2019

1/24/2019

Budget

The secondary research would collect data and literature from diverse source. In this part different exiting literature would be brought or subscribed. There would be some application fee to avail certain government data type. Considering all of these 1000 UAD is justified for the current research. The primary data would be collected from different franchise of McDonald’s. This would involve travelling cost, questionnaire cost, and cost for employing server and so on. On the other hand the interview would need recoding equipments which would be borrowed on rent (Collis & Hussey, 2013).  Considering the sample size of both type of research method the budget is justified. The cost for report development, printing and publishing cost the 500AUD is required for the current research.

Activity

Budgeted amount (AUD)

Secondary research and the review of literature

1000

Data collection

1500

Analysis of data

500

Report development

500

Total

3500

References

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Albrecht, S. L., Bakker, A. B., Gruman, J. A., Macey, W. H., & Saks, A. M. (2015). Employee engagement, human resource management practices and competitive advantage: An integrated approach. Journal of Organizational Effectiveness: People and Performance, 2(1), 7-35.

apply.mcdonalds. (2018). Crew Perkst. [online] Available at: https://apply.mcdonalds.com.au/public/index.cfm?action=showPublicContent&assetCategoryId=2460 [Accessed 1 Oct. 2018].

Bal, P. M., Kooij, D. T., & De Jong, S. B. (2013). How do developmental and accommodative HRM enhance employee engagement and commitment? The role of psychological contract and SOC strategies. Journal of Management Studies, 50(4), 545-572.

Bharwani, S., & Butt, N. (2012). Challenges for the global hospitality industry: an HR perspective. Worldwide Hospitality and Tourism Themes, 4(2), 150-162.

Bhatnagar, J., & Biswas, S. (2010). Predictors & outcomes of employee engagement: Implications for the resource-based view perspective. Indian Journal of Industrial Relations, 273-286.

Bryman, A., & Bell, E. (2015). Business research methods. Oxford University Press, USA.

Collis, J., & Hussey, R. (2013). Business research: A practical guide for undergraduate and postgraduate students. Macmillan International Higher Education.

Cross, D. (2017). Employee Retention Strategies in the Fast Food Industry.

disruptcre. (2018). Fast-Food Industry Has 150% Employee Turnover Rate. [online] Available at: https://disruptcre.com/retail/fast-food-industry-150-employee-turnover-rate/ms [Accessed 1 Oct. 2018].

Gupta, N., & Sharma, V. (2016). Exploring employee engagement—a way to better business performance. Global Business Review, 17(3_suppl), 45S-63S.

Hair Jr, J. F., Wolfinbarger, M., Money, A. H., Samouel, P., & Page, M. J. (2015). Essentials of business research methods. Routledge.

ibisworld. (2017). Fast Food and Takeaway Food Services – Australia Market Research Report. [online] Available at: https://www.ibisworld.com.au/industry-trends/market-research-reports/accommodation-food-services/fast-takeaway-food-services.html [Accessed 1 Oct. 2018].

Kaliannan, M., & Adjovu, S. N. (2015). Effective employee engagement and organizational success: a case study. Procedia-Social and Behavioral Sciences, 172, 161-168.

Karatepe, O. M. (2013). High-performance work practices and hotel employee performance: The mediation of work engagement. International Journal of Hospitality Management, 32, 132-140.

Peterson, H. (2015). McDonald’s Australia reveals how America is doing it all wrong. [online] Available at: https://www.businessinsider.in/McDonalds-Australia-reveals-how-America-is-doing-it-all-wrong/articleshow/47179923.cms [Accessed 1 Oct. 2018].

Quinlan, C., Babin, B., Carr, J., & Griffin, M. (2019). Business research methods. South Western Cengage.

Sahay, A. (2016). Peeling Saunder’s Research Onion.

Sekaran, U., & Bougie, R. (2016). Research methods for business: A skill building approach. John Wiley & Sons.

Shuck, B., & Wollard, K. (2010). Employee engagement and HRD: A seminal review of the foundations. Human Resource Development Review, 9(1), 89-110.

Shuck, B., & Wollard, K. (2010). Employee engagement and HRD: A seminal review of the foundations. Human Resource Development Review, 9(1), 89-110.

Shuck, B., Reio Jr, T. G., & Rocco, T. S. (2011). Employee engagement: An examination of antecedent and outcome variables. Human resource development international, 14(4), 427-445.

Slåtten, T., & Mehmetoglu, M. (2011). Antecedents and effects of engaged frontline employees: A study from the hospitality industry. Managing Service Quality: An International Journal, 21(1), 88-107.

Sorenson, S. (2013). How employee engagement drives growth. Gallup business journal, 1, 1-4.

Statista. (2018). Australia – leading fast food restaurant chains 2018 | Statistic. [online] Available at: https://www.statista.com/statistics/871574/australia-leading-fast-food-restaurant-chains/ [Accessed 1 Oct. 2018].

Tsai, M. C., Cheng, C. C., & Chang, Y. Y. (2010). Drivers of hospitality industry employees job satisfaction, organizational commitment and job performance. African Journal of Business Management, 4(18), 4118-4134.

Zheng, C., & Lamond, D. (2010). Organizational determinants of employee turnover for multinational companies in Asia. Asia Pacific journal of management, 27(3), 423-443.

Zikmund, W. G., Babin, B. J., Carr, J. C., & Griffin, M. (2013). Business research methods. Cengage Learning.